Millions of households face a sharp rise in council tax and fewer police on the street under plans to be unveiled by George Osborne this week.

Families in average Band D properties would pay an extra £30 a year to raise £2billion towards elderly care.

The measure will be included in the Chancellor’s spending review on Wednesday, when he is also expected to cut policing budgets – despite fears it could leave the UK vulnerable to a Paris-style attack.

Millions of people could face higher council tax to pay for England's elderly care crisis under plans to be unveiled this week

Yesterday he also hinted that he could cut the overall pace of his austerity programme to soften the impact of his controversial changes to tax credits.

Under the surprise council tax move, Mr Osborne is due to allow town halls to raise bills by up to 2 per cent to cover shortfalls in social care. The increase would come on top of an annual rise of another 2 per cent.

If all councils decided to impose the 2 per cent ‘social care’ precept, as much as £2billion could be raised by 2020.

It comes after years in which the Chancellor has urged councils to freeze their bills. Under the proposal, each local authority could decide if they want to raise the cash, but it must be spent in its entirety on social care.

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Yesterday, Mr Osborne signalled he will press ahead with controversial cuts to police budgets, despite days of protests by senior officers who claim it could make Britain unable to respond to a terror atrocity.

He said: ‘Every public service has to make sure it is spending money well. You cannot have national security without economic security.’ But during a interview on BBC1’s Andrew Marr Show, he twice refused to say if he remained committed to the overall target, announced in July, of running a £10billion surplus by 2020.

This is the crucial point at which the UK’s current account gets back into the black – and the £1.5trillion national debt starts to be paid off.

The Treasury has also suffered the setback of worse than expected borrowing figures. It emerged on Friday that £54billion has been borrowed in the first seven months of this year alone – potentially blowing his deficit reduction plan off course.

Labour claimed the Chancellor’s plans were in ‘utter chaos just months after he announced them’.

Chancellor George Osborne has previously told town halls that if they want to put 2 per cent on their bills, they have to hold a local referendum

'PUBLIC NEED CONVINCING ON AID'

It is hard to convince the public of the need to send billions in aid abroad, George Osborne admitted yesterday.

The Chancellor said many Britons were ‘cross’ about cash being ‘wasted’ overseas and vowed again to review the UK’s generous foreign aid budget to ensure it is providing value for money.

‘There’s no doubt that it’s been hard pounding on, persuading the British public of the merits of the aid budget,’ he said. Britain spends 0.7 per cent of its national income on aid, but there is anger at the foreign handouts while public services at home face massive cuts.

Mr Osborne said more money would be used to tackle the ‘source’ of terrorism after Paris. ‘You will see a much greater emphasis on ... fragile states and a very thorough review of how we spend the money across the aid programme. People are very cross about public money being wasted abroad,’ he told the Sunday Times.

The party also said it would be a huge mistake not to listen to the warnings of senior police about the danger of slashing budgets.

But Mr Osborne said a settlement had been reached with Home Secretary Theresa May – along with every other Whitehall department – and cuts to the Home Office and policing budgets would now go ahead.

He said a separate budget for counter-terrorism would be boosted by 30 per cent to £15billion over the next five years – which would help beef up technology to track terror suspects and create a new operations centre for the security services.